Why the Helloworld (ASX:HLO) share price is sinking lower today

The Helloworld Travel Ltd (ASX:HLO) share price is tumbling lower on the day of its AGM. Here’s what you need to know…

| More on:
jet plane representing flight centre share price about to take off on runway

Image source: Getty Images

The Helloworld Travel Ltd (ASX: HLO) share price has come under pressure on the day of its annual general meeting.

In early afternoon trade, the travel booking company’s shares are down over 3.5% to $2.95.

Why is the Helloworld share price dropping lower?

Today’s decline appears to have less to do with its annual general meeting and more to do with a piece of COVID-19 vaccine news.

Fellow travel bookers Flight Centre Travel Group Ltd (ASX: FLT) and Webjet Limited (ASX: WEB) have also come under pressure today after concerns were raised with the data from the AstraZeneca COVID-19 vaccine candidate.

Last week, that data showed that when trial participants were given a half dose, followed by a full dose at least one month apart, the vaccine was 90% effective. Whereas, when given as two full doses at least one month apart, the vaccine showed just 62% efficacy.

Overnight, the UK-based pharmaceutical giant revealed that the more effective dosage was actually administered by accident and due to a manufacturing error.

It also came to light that the more effective dosage was given only to a lower risk group, which sparked fears that it may not be as effective against higher risk individuals.

In light of this, AstraZeneca looks set to have to undertake another clinical trial to prove its efficacy, which could push back its launch date.

What about the Helloworld AGM?

Given that Helloworld only recently released its first quarter update, there wasn’t much new information released with its presentation.

Management continues to expect FY 2021 to be a tough year and looks forward to a big improvement in the following financial years.

It commented: “The remainder of this financial year will continue to be challenging and we will continue to incur underlying EBITDA losses in the vicinity of $1.5-$2 million per month at least until the fourth quarter of FY21 however depending upon what other international bubbles may have opened up by then we’re hopeful that we would be close to a break even position by the last quarter of the current financial year.”

“Beyond that and looking forward into FY22, given the recent extraordinary success of the vaccine trials it is not unreasonable to assume the rest of the world will start to open up throughout the second half of 2021 and into the first half of 2022 and while we do not believe things will return to their previous levels in FY22 they will certainly continue to get better and better and we’re hopeful that FY23 will see a return to our previous TTV and revenue levels,” it added.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of August 16th 2021

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Helloworld Limited and Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News